Nippon bid options open on Pilkington

NIPPON Sheet Glass today denied reports that it was preparing a full-scale bid for Pilkington Glass but did not rule out a move to use its 20.6% stake as springboard for an offer.

The Japanese group was responding to suggestions that an informal approach had been made at a price of 80p a share, valuing the group at £1bn. On Friday Pilkington shares closed at 60 1/2p.

NSG said that, while no approach had been made, it did not rule out future possibilities. NSG became the largest shareholder in Pilkington in November 2001, when it doubled its previous stake of 10%. The company indicated then that the holding did not fully meet its ambitions for Pilkington.

'We were unable to settle the negotiations to our complete satisfaction,' president Yozo Izuhara admitted. Paolo Scaroni, then chief executive of Pilkington, and now deputy chairman, has welcomed the raising of the stake as an endorsement of the company's technology.

Despite its large holding the Japanese company has not been able to obtain board representation at Pilkington. Struggling as No 2 to Asahi Glass, Japan's largest maker of flat glass, Nippon is said by Tokyo analysts to be keen to expand globally, but it has halved its profit target for 2004 because of the soaring costs of fibreoptic development.